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John Sculley: The billion dollar man

He took Pepsi Cola to the number-one spot in the cola wars and he helped Steve Jobs make Apple a multibillion-dollar company. Now John Sculley has created a ‘life-changing’ smartphone for the developing markets. Anand Raj OK meets him in Dubai

features editor Anand Raj OK
10 Oct 2014 | 12:00 am
  • John believes the smartphonewill become an even bigger partof our life than it already is.

    Source:Gulf News Image 1 of 6
  • Steve Jobs (left) lured John away from Pepsi Co in 1983.

    Source:Getty Images Image 2 of 6
  • John learnt many lessons in leadership from Jobs.

    Source:Getty Images Image 3 of 6
  • Seen here with an Apple IIGS, John was with Apple for just over 10 years.

    Source:Corbis Image 4 of 6
  • John at the launch of Obi smarthones in Dubai.

    Source:Gulf News Image 5 of 6
  • John his wife Diane Gibbs Poli.

    Source:Getty Images Image 6 of 6

It was an offer he couldn’t refuse. John Sculley was the President of PepsiCo when Steve Jobs asked him to join Apple. “It was a late evening and we were standing on the terrace of Steve’s apartment in the San Remo building in New York City,” the 75-year-old says, now sitting in the lobby of the Armani Hotel in Dubai’s Burj Khalifa. “I told him ‘Steve, I’ve thought about it, and I’m staying with Pepsi’.

“Steve was 26 then and I remember he had jet-black hair. He looked down at his running shoes and paused for a very long time. Then he looked up and straight into my eyes and said ‘John, do you want to sell sugar water for the rest of your life or do you
want to come with me and change the world?’”

That was in March 1983, a month before John’s 44th birthday. But two years later he and the late Jobs famously clashed over product direction, and in 1985, after losing a boardroom battle for control of the company to John, Jobs resigned as chairman of Apple.

During John’s decade-long tenure at Apple, thanks largely to his marketing acumen, he helped grow its revenues from $570 million to
$8.3 billion (from Dh2 billion to Dh30.5 billion) by the time he was forced to resign in 1993.

John smiles as he leans back into the sofa and squeezes his wife Diane’s hand. “I’m still changing the world now,” he says, laughter lines crinkling at the sides of his blue eyes. This time it’s with a mobile phone – the Obi, which is aimed at the
world’s social media-obsessed youth in emerging markets. “This is the
first generation that doesn’t see the phone as an accessory,” he says. “They see it as an extension of themselves
and we have created the Obi around that concept.”

The entrepreneur co-founded Inflexionpoint, the company behind the phone in 2011, with London-based finance strategist Shane Maine; Toronto-based financial services entrepreneur Gordon McMillan; and India-based global distribution entrepreneur Neeraj Chauhan. to create a multibillion dollar IT supply chain company. He hopes the Obi will be what he calls a ‘moonshot’ moment - ones that change lives.

The author of Direction For The Nineties – Seven Speeches and Odyssey: Pepsi to Apple, has now written another book about those moments Moonshot!

“It s all about solutions for entrepreneurs. It’s intended not just for people in Silicon Valley but for people all over the world because I believe a lot of the innovation is going to be coming from the developing world. The people who aspire to be the new middle class… they are going to be the new innovators. And their ideas are going to be flowing back into the West... to the rest of the world.

“In the recent past, ideas mostly flowed from the West, but now it’s going to be the other way round.” That, he says, is going to be one
of the most dramatic changes of
the next decade.

A man who firmly believes gadgets have the power to change the world, John says that while the Macintosh and iPhone possessed technology that many other gadget manufacturers aspired to have, he believes that
the Obi will be a game changer in the smartphone world.

“Developing and creating new products for customers is exactly what we are now doing with this range of smartphones,” he says.

“Design and lifestyle are the factors that are highlights of Obi,” he says. “In a market saturated and cluttered with mobile-phone makers all talking about technology, we decided to sell Obi smartphones on the basis of not just beautiful design but the fact that it is a lifestyle.”

John is convinced there is a huge market among the youth in developing markets around the world “who may aspire for a product like an Apple but may not have a budget to buy it.” The Obi phones are priced between Dh399 and Dh799. 


Then to underscore the fact that the phones are already a huge hit, he leans forward and says, “We launched the phones in India just a couple of months ago and our television commercial is now tied with Coca-Cola’s as the most favourite campaign.”

So what does he think Steve Jobs – who died of cancer in 2011 – would have said if he had showed him the Obi phone?

John pauses for a moment then laughs. “He would have said ‘It’s a nice phone, but I could have done
it better’. And you know what?
I think he would have done it better because he was a genius.”

Like Jobs, John’s success came swiftly. Armed with an MBA from Wharton – an Ivy League business school in Pennsylvania – he began his corporate career in 1967, aged 28, as a trainee at PepsiCo. Just three years later he had became the company’s youngest vice-president of marketing.

His experience-based marketing approach – for example, it was he who initiated the Pepsi Challenge taste tests where a majority of people who tasted Pepsi and Coca-Cola from similar cups chose the former – and his involvement in the development and launch of the first plastic soft drink bottle helped dethrone Coca-Cola as the number-one selling cola in the US. This was no mean feat – at the time Coca-Cola had been outselling Pepsi by 5:1.

In addition, the story of how he managed to convince Sam Walton – the founder of the supermarket chain Walmart – to sell soft drinks in his stores in the 1970s is a lesson for all wannabe marketeers. Sam, says John, wasn’t keen to stock or sell soft drinks – which at the time were available only in glass bottles – because he feared they would break and mess up the shop floors. But, keen to make an impression on the businessman, John, armed with the brand new two-litre PET bottle of Pepsi, went to him.

After shaking hands, John held out a bottle to Sam, but cunningly before he could grasp it, John intentionally let it drop. “Everyone in the room gasped as the bottle hit the floor, bounced then rolled and came to rest, unbroken,” he says. There was a momentary silence in the room then broad smiles all around. The rest, as they say, is history...

At 38, 10 years after first joining PepsiCo, John became the company’s youngest president and CEO. He was with the soft drink giant until 1982 when Jobs pursued him. “I’d studied architectural design [at Brown University before getting an MBA] and I guess one of the things that brought me and Steve close was not computing, but industrial design,” he says.


John admits not knowing a great deal about computers at that time. But the 1980s were the cusp of the personal computer revolution and Steve and John – who would later be known as ‘the dynamic duo’ – believed beautiful design went hand in glove with fantastic products. “Steve in particular felt that you had to begin design from the vantage point of the experience of the user,” says John. “Back in the early 1980s this was an outrageous idea because people thought that personal computers were just smaller versions of bigger computers.”

But the Pepsi challenge, John says, was a tipping point of sorts. “That’s what really brought Steve and me together... the idea of experience marketing, such as the Pepsi challenge, that I had developed,” he says. “Steve was fascinated by that.” The computer guru believed that if that kind of marketing technique had helped Pepsi go from a small regional US brand to overtaking Coca-Cola in the US, it could also be used to make computers a consumer product. “I remember Steve telling me ‘I’m building this new incredible computer called the Macintosh which is all about consumer experience.
And I want you to show us how to bring experience marketing to something in the technological field like computers.”

The first thing John says they decided to do was “never talk about technology but to talk about computers as a lifestyle. And it’s something Apple has been doing for more than 30 years.”

So how did he come up with ideas such as the Pepsi challenge and the PET bottles?

“Curiosity,” says John. “You need to have a curious mind to succeed. If you are curious you are constantly observing things. And you need to constantly keep asking yourself, ‘Is there a better way to do things?’.”

Curiosity, he says, is what can help an entrepreneur characterise something into a billion-dollar problem. “And if you want to build a billion-dollar business, you need to solve a billion-dollar problem.”

According to John, there are two kinds of leaders who can characterise a billion-dollar problem. Firstly, “Those who manage businesses and focus on competition – that’s what we did at Pepsi.” And secondly, “Leaders who shape entirely new industries and focus on brand new problems in a better way for customers – which is what we did
at Apple.”

And it’s as the second kind of leader that John would like to be remembered. “Since Apple, I’ve focused on creating new products and solutions for customers that they had never thought of,” he says.

After leaving Apple, Sculley invested in and helped set up several successful businesses including MetroPCS, a prepaid wireless phone service which is now a multibillion-dollar public company in the US.

For a brief while – in the early 1990s – John dabbled in politics, too, and served with Hillary Clinton on a national education council. In fact, John sat next to Hillary during former US President Bill Clinton’s first State of the Union address in January 1993.

Later, he returned to what he enjoys doing best, launching business ventures including Hotwire.com, a discount travel website; Intralinks, a global technology provider; and more than a dozen other dotcoms, many of which were hugely successful.

As a firm believer that the customer is king, John says, “The market is moving towards customers having more power.

“Customers are now listening to other customers; they pay more attention to another customer on how he rates a particular product or service than he would to advertising. Which is which is why we are hoping that our brand ambassadors will be our customers.” This theory explains why none of the ads for Obi feature celebrities. “Just as Apple has built a cult of loyal customers, we want to build a cult of loyal customers. This time we are taking advantage of social media to accomplish that.”

Among others, one plan is to have regular contests on social media where youth will be encouraged to create versions of the phone’s logo. The chosen ones will be used in ads and TV commercials. 

A highly respected trend spotter – among other things, he predicted that optical storage mediums such as the CD-Rom would revolutionise the use of personal computers – John believes that the next big tech leap is going to be in the area of mobile payments. “Banking has already gone online. But the technology is getting better and better with respect to security concerns. I think mobile payments are going to be huge, very huge in the coming years.”

He is also sure that smartphones will become increasingly integrated into everything that we do. “I think there will be billions of sensors attached to everything that will be able to monitor just about everything that’s happening within and around you. They will be able to send information to your mobile device that will help you get hugely smarter. The smartphone is going to become a bigger part of our life than it is today.”

And just how much bigger is that?

“Think about it,” he says. “First we had cellphones that people used for talking to each other. But today, most young people don’t talk anymore. They text. Well, actually they don’t text anymore they do photos. Oh, actually they don’t do photos any more, they do videos... So you start to see that technology is giving an opportunity for the devices to become more and more social.”

But is it? If anything aren’t these devices affecting social interaction? Haven’t people reduced the time they talk to friends, family?

John admits, “Absolutely. There are good things and bad when it comes to technology.” He then relates an incident he witnessed when he visited a US university recently.

“I saw a group of students all sitting around a table, but they were not talking; they were all busy on their smartphones. And what is interesting is that they were messaging each other, sitting next to each other! So, yes, there are some things we can’t even anticipate.

“I guess it’s because the young people of today are hardwired differently. They don’t know of a world before these things existed.”

So where does he see technology
15 years down the road?

“Ahh,” he says, literally rubbing his hands in glee to answer a question about the future.

“We will see the clear foundations for an entirely new middle class economy; the one in the West has become unaffordable because of
overconsumption.

“There is too much debt and to make it sustainable, a new middle class will be created in the developing markets. That’s why it’s important to build an exceptional customer experience. I am talking about amplifying the customer’s experience by maybe 10 times what’s out there now by giving them better and more useful products and doing it with very disruptive prices. And this is all possible because technology has the tools to do it. So yes, 2030 will be an exciting time.”

And what does he think are the necessary traits for a wannabe entrepreneur to be ready to grab the opportunities that will be coming up?

“I’d say, find a noble cause. When I spent time with Bill Gates or Steve Jobs we never talked about making money; we talked about noble causes. Their noble cause was to make computers personal, empower knowledge workers with incredible tools for the mind and try to change the world one person at a time. So my advice to an entrepreneur is find
a noble cause.

“Second, try to articulate it in terms of a big multibillion dollar problem that needs to be solved.

“Third, begin to think of what a better way to solve it would be.

“Four, simplify. Steve Jobs used to say the most important decisions are not what to put in but what to leave out. I think that statement explains a lot.”

But, in addition to all of this, what does he think the role of a leader is?

“I believe leadership used to be managing what we have – which
was managing scarce resources. Today, there is an abundance of
ideas, an abundance of resources.
In the digital world, there is an almost infinite amount of resources available for us waiting to be exploited,” says John.

In this scenario, leadership is about building things, he believes.

“The rewards of leadership come to those who are the best builders. And how do you build? You adapt,”
he says.

John suggests taking a peek into the past for some clarification on this point. “[Charles] Darwin said that species were able to advance because of their ability to adapt to the environment. The real skill in leadership is to be a builder – to build the adaptive society, to build the adaptive corporation, to become what I call the ‘adaptive innovator’. That’s my model for innovation.”

John concludes his point by reflecting on Steve’s methodology of innovation, which he says was dfferent from everyone else’s. “Steve always believed the most important decisions you make are not the things you do – but the things that you decide not to do.”

features editor Anand Raj OK

By Anand Raj OK

Features Editor